Your Super vs “MySuper”
There has been a lot of talk recently about the possible introduction of a universal default super fund with low fees and limited investment options called My Super. Already four out of five Australian workers have their superannuation savings in a “default fund” and have not exercised their right to choose their superannuation investment strategy.
Australians generally complain that super is complicated and the rules are always changing and so My Super will no doubt add to that complication. There have been several comments in the media recently on both sides of the debate but the key players seem to be in agreement on one key point. You get what you pay for.
The chief executive of industry fund Intrust Super, Brendan O’Farrell, said consumers would potentially be worse off in My Super as it would “have to invest in an index and not be actively managed. This would take us backwards to the time when employers told their employees which super fund was the default and strip workers of the choices they now have. “
Mr John Brogden chief executive of the Investment and Financial Services Association (IFSA) says it could be “a lot of change for very little return as there are already many super funds that charge low fees. People will only become more disengaged with their super.”
Shadow Treasurer Joe Hockey echoed Mr Brogden’s comments, dubbing MySuper “paternalistic and that it will promote disengagement with superannuation”.
It is important to consider that one of the key drivers of superannuation growth can actually be the strategy itself. This may include salary sacrifice and insurance inside super, or for those of 55 years of age, the transition to retirement strategy.
With any introduction of change it would be nice to one day consider everyone being on the same superannuation scheme as our parliamentary members!